Legal Proceedings Against Agrokor in Six Countries

Since the beginning of the extraordinary administration process in Agrokor, several civil and enforcement proceedings have been initiated in Croatia and five other countries – Slovenia, Serbia, Bosnia and Herzegovina, Montenegro, and Great Britain against the group and part of its dependent and related companies, with the latest being a request submitted by Russian Sberbank in Bosnia and Herzegovina at the end of last week, it was announced on Friday by the group.

Agrokor received a request on September 8, submitted by Sberbank of Russia to the Municipal Court in Sarajevo for a ban on the sale or encumbrance of Agrokor’s shares in Konzum Sarajevo and the company Ambalažni servis. A hearing in this case was scheduled for September 14 but was postponed for procedural reasons and rescheduled for October 5, Agrokor stated.

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They also emphasize that the Extraordinary Administration is aware that certain companies from the Sberbank group have initiated enforcement proceedings and requested the issuance of temporary measures in Bosnia and Herzegovina against the group’s companies. These are requests from Russian Sberbank to the Municipal Court in Travnik for the issuance of a temporary measure prohibiting the sale or encumbrance of shares held by Jamnica in Sarajevo’s Kiseljak, while Ljubljana and Zagreb Sberbank have initiated enforcement proceedings against them before the same court.

Additionally, Zagreb and Ljubljana Sberbank have also initiated enforcement proceedings before the courts in Sarajevo and Travnik against Agrokor regarding shares in Konzum Sarajevo, the company Ambalažni servis, and Boreas Kreševo.

– The Extraordinary Administration has not yet received documents related to these proceedings, but necessary steps will be taken if delivery occurs. The Extraordinary Administration has submitted a request for the recognition of the extraordinary administration process in Bosnia and Herzegovina, which has been contested by Sberbank. The Extraordinary Administration expects the delivery of Sberbank’s objections and will take steps to contest those objections, Agrokor stated.

In Slovenia, they remind that the Extraordinary Administration has submitted responses to the objections and appeals filed by two Sberbank companies and the Republic of Slovenia in the recognition process in Slovenia, and a decision from the Slovenian court on the issuance of a temporary measure in favor of Russian Sberbank over Agrokor’s shares in Mercator has already been delivered. The Extraordinary Administration has filed an objection against that temporary measure “although it is expected that the court will make a declaratory decision to terminate the proceedings based on the law,” the statement reads, adding that existing proceedings remain suspended based on the law in accordance with the recognition decision of July 14.

The most proceedings are ongoing in Serbia. Namely, during August, the Extraordinary Administration filed objections against the enforcement decisions made at the request of members of the Sberbank group over shares in the companies MG Mivela held by Jamnica; Dijamant, KRON, M-Profil SPV, and Nova Sloga Trstenik, held by Agrokor; and Idea held by Konzum.

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In these proceedings, a court decision is awaited, and in the meantime, Banca Intesa has initiated debt collection proceedings against Konzum, Jamnica, Zvijezda, Agrokor Trgovina, and PIK Vrbovec, as well as a proposal for the determination of a temporary measure regarding the shares in the company Idea held by Konzum, to which the Extraordinary Administration is preparing a response. Banca Intesa has also initiated enforcement proceedings against Agrokor over its shares in the companies Dijamant, KRON, M-Profil SPV, and Nova Sloga, and the Extraordinary Administration has filed an objection in this proceeding as well.

Furthermore, Russian Sberbank has obtained the issuance of temporary measures prohibiting the disposal or encumbrance of Agrokor’s shares in Dijamant, Leda in Frikoma, Konzum in the company Idea, and Agrokor in the companies KRON, M-Profil, and Nova Sloga. The Extraordinary Administration has filed or will soon file appeals against these temporary measures, and a court decision is expected, the statement says.

– The Extraordinary Administration submitted a request for the recognition of the extraordinary administration process in Serbia on July 26, 2017. This request was contested by Sberbank and Banca Intesa. The first-instance court made a decision on August 30, 2017, rejecting the request of the Extraordinary Administration. An appeal was filed against this decision on September 14, 2017, and the Extraordinary Administration is awaiting a court decision, it adds.

As further stated in the announcement, the Extraordinary Administration has no further information to report in the enforcement proceeding initiated by Hipotekarna Banka Ad Podgorica against the company Ledo d.o.o. in Montenegro, while in July it submitted a request for the recognition of the extraordinary administration process before the High Court of Justice of England and Wales. During the reporting period, Sberbank filed an objection to the request and submitted further evidence in its response. The Extraordinary Administration submitted further evidence, and a hearing is scheduled for the end of October, they state, adding that arbitration proceedings are suspended until a decision on this request is made.

It is already known that the Croatian High Commercial Court rejected the appeal of Russian Sberbank against the decision of the Commercial Court in Zagreb to annul the decision of the Temporary Creditor’s Council from June 8, 2017, which granted approval to the extraordinary commissioner to take on new debt. The procedure for determining the temporary measure prohibiting initiated by Sberbank of Russia has been returned to the Commercial Court in Zagreb for reconsideration, and the Extraordinary Administration is awaiting news from the court, it is stated.

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Furthermore, the Commercial Court in Zagreb dismissed three requests from that Russian bank as inadmissible on September 6 – the request to determine the nullity of the provisions of the Oldest Loan Agreement allowing “roll-up” financing of old debts and the repurchase of bonds as well as other restrictive provisions of that Agreement; the request to determine the nullity of the transaction by which Agrokor repurchased bonds at their nominal value; and the request for the Commercial Court in Zagreb to submit a request to the Constitutional Court for the assessment of the constitutionality of part of the Law on the Procedure of Extraordinary Administration in Companies of Systemic Importance for the Republic of Croatia (Articles 40 and 41).

– The Extraordinary Administration is taking all necessary steps regarding all proceedings in accordance with the Law on the Procedure of Extraordinary Administration and in the best interest of Agrokor d.d. and its related and dependent companies. The Extraordinary Administration is aware that certain other proceedings have been initiated but have not yet been officially delivered to the relevant Agrokor company. These proceedings will be considered when delivery is made, it is emphasized in Agrokor’s statement.